Leave Your Legacy
August 25, 2013 § 1 Comment
Leave Your Legacy: Pissed Off For Greatness
Wins and Losses – they are a dime a dozen
But EFFORT?
Nobody can judge effort
Effort is between YOU and YOU!NOW…you have to show that you are a different creature than you were 5 minutes ago….
It means you are pissed off for greatness
Because if you aren’t pissed off for greatness
Then that means you are ok with being mediocreSO, LET’S DO WHAT WE DO!
Cosmos: Flatland and Googol
July 20, 2013 § Leave a comment
One of the biggest influences on my young scientific brain was the amazing thirteen part Cosmos series written by Carl Sagan and his wife Ann Druyan. It aired in 1980 when I was 13 years old and I still feel it’s impact and influence on my young mind. It was the most widely watched series in the history of public television and is still one of the most widely watched PBS series in the world. It’s been broadcast in more than 60 countries and watched by more than 500 million people. For it’s day, it was so well produced from the special effects to the soundtracks to the simple Storytelling. The series brilliant blending of science, history, poetry, music creates tremendous education for a young mind and at 13 I was a sponge.
In this series, the concepts include our universe, DNA, astronomy (Kepler, Copernicus, and Tycho Brahe), an entire episode devoted to Mars, Space-Time and Einstein, Voyager’s Golden Record and our collective intelligence. It’s all here.
One particular episode stood out for me above all others. The concepts described in the Flatland episode intrigues me to this day. The possibilities of “what’s out there?” and how it might look make me full of wonder. I still love the part how the 3D cube casts a shadow on the 2D Flatland and further, how we can imagine the fourth dimension by creating a “shadow” in our 3D world…even though we can never physically see this 4th dimensional “shape”.
FLATLAND:
Today I think of this concept as “Perspective” and I regular use this Flatland analogy when I feel perspective is needed.
I love how Carl simply poses great questions and teaches without lecturing.
“Cosmology brings us face-to-face with the deepest mysteries of questions that were once treated only in religion and myth”
“Who know for certain? Who shall here declare it? Whence was it born?…….these words are 3500 years old. They are taken from the Rig Veda, a collection of early Sanskrit hymns. The most sophisticated ancient cosmological ideas came from Asia and particularly from India. Here, there’s a tradition of skeptical questioning and un-selfconscious humility before the great cosmic mysteries..”
I marvel at the consistent blend of poetry, science, history, and cultural concepts and begin to understand how these ideas were planted in my young mind as they were in many other young minds.
As for the Googol and Googolplex, little did we know that 20 years later, these words would take on a whole new meaning. The concept of “the infinity of small” and the “infinity of large” still intrigues me to this day.
GOOGOL and a GOOGOLPLEX
I’ll end this mini-video series with one of Carl Sagan’s most persistent and timeless messages for humanity
“Those worlds in space are as countless as all the grains of sand on all the beaches of the Earth. Each of those worlds is as real as ours. In every one of them, there’s a succession of incidence, events, occurrences which influence its future. Countless worlds, numberless moments, an immensity of space and time. And our small planet, at this moment, here we face a critical branch-point in the history. What we do with our world, right now, will propagate down through the centuries and powerfully affect the destiny of our descendants. It is well within our power to destroy our civilization, and perhaps our species as well. If we capitulate to superstition, or greed, or stupidity, we can plunge our world into a darkness deeper than time between the collapse of classical civilization and the Italian Renaissance. But, we are also capable of using our compassion and our intelligence, our technology and our wealth, to make an abundant and meaningful life for every inhabitant of this planet. To enhance enormously our understanding of the Universe, and to carry us to the stars.”
Live Like A Dog
July 4, 2013 § Leave a comment
WHY DOGS LIVE LESS THAN HUMAN ? ANSWER OF A 6 YEAR OLD
I found this anonymous story on the web. It speaks a powerful truth….
==============
Being a veterinarian, I had been called to examine a ten-year-old Irish Wolfhound named Belker. The dog’s owners, Ron, his wife Lisa, and their little boy Shane, were all very attached to Belker, and they were hoping for a miracle.
I examined Belker and found he was dying of cancer. I told the family we couldn’t do anything for Belker, and offered to perform the euthanasia procedure for the old dog in their home.
As we made arrangements, Ron and Lisa told me they thought it would be good for six-year-old Shane to observe the procedure. They felt as though Shane might learn something from the experience.
The next day, I felt the familiar catch in my throat as Belker ‘s family surrounded him. Shane seemed so calm, petting the old dog for the last time, that I wondered if he understood what was going on. Within a few minutes, Belker slipped peacefully away.
The little boy seemed to accept Belker’s transition without any difficulty or confusion. We sat together for a while after Belker’s Death, wondering aloud about the sad fact that animal lives are shorter than human lives.
Shane, who had been listening quietly, piped up, ”I know why.”
Startled, we all turned to him. What came out of his mouth next stunned me. I’d never heard a more comforting explanation. It has changed the way I try to live.
He said,”People are born so that they can learn how to live a good life — like loving everybody all the time and being nice, right?”
The Six-year-old continued,
”Well, dogs already know how to do that, so they don’t have to stay as long.”
The moral of the story of a dog’s life?
- Live simply.
- Love generously.
- Care deeply.
- Speak kindly.
- Be loyal.
- Never pretend to be something you’re not.
Remember, if a dog was the teacher you would learn things like:
- When loved ones come home, always run to greet them.
- Never pass up the opportunity to go for a joyride.
- Allow the experience of fresh air and the wind in your face to be pure Ecstasy.
- Take naps; Stretch before rising.
- Run, romp, and play daily.
- Thrive on attention and let people touch you.
- Avoid biting when a simple growl will do.
- If what you want lies buried, dig until you find it.
- When someone is having a bad day, be silent, sit close by, and nuzzle them gently.
On any given day:
- On warm days, stop to lie on your back on the grass.
- On hot days, drink lots of water and lie under a shady tree.
- When you’re happy, dance around and wag your entire body.
- Delight in the simple joy of a long walk.
ENJOY EVERY MOMENT OF EVERY DAY!
Pixars 22 Rules of Storytelling
June 30, 2013 § 1 Comment
Pixar storyboard artist Emma Coats tweeted these rules that she learned from her more senior colleagues.
PBJPublishing.com thought they were so good, they chose to share them the best way they know how – through design. Enjoy!
http://www.pbjpublishing.com/blog/pixars-22-rules-to-phenomenal-storytelling-infographic/
We thought it’d be helpful to get Pixar’s 22 rules in text form too from The Pixar Touch blog:
#1: You admire a character for trying more than for their successes.
#2: You gotta keep in mind what’s interesting to you as an audience, not what’s fun to do as a writer. They can be v. different.
#3: Trying for theme is important, but you won’t see what the story is actually about til you’re at the end of it. Now rewrite.
#4: Once upon a time there was ___. Every day, ___. One day ___. Because of that, ___. Because of that, ___. Until finally ___.
#5: Simplify. Focus. Combine characters. Hop over detours. You’ll feel like you’re losing valuable stuff but it sets you free.
#6: What is your character good at, comfortable with? Throw the polar opposite at them. Challenge them. How do they deal?
#7: Come up with your ending before you figure out your middle. Seriously. Endings are hard, get yours working up front.
#8: Finish your story, let go even if it’s not perfect. In an ideal world you have both, but move on. Do better next time.
#9: When you’re stuck, make a list of what WOULDN’T happen next. Lots of times the material to get you unstuck will show up.
#10: Pull apart the stories you like. What you like in them is a part of you; you’ve got to recognize it before you can use it.
#11: Putting it on paper lets you start fixing it. If it stays in your head, a perfect idea, you’ll never share it with anyone.
#12: Discount the 1st thing that comes to mind. And the 2nd, 3rd, 4th, 5th – get the obvious out of the way. Surprise yourself.
#13: Give your characters opinions. Passive/malleable might seem likable to you as you write, but it’s poison to the audience.
#14: Why must you tell THIS story? What’s the belief burning within you that your story feeds off of? That’s the heart of it.
#15: If you were your character, in this situation, how would you feel? Honesty lends credibility to unbelievable situations.
#16: What are the stakes? Give us reason to root for the character. What happens if they don’t succeed? Stack the odds against.
#17: No work is ever wasted. If it’s not working, let go and move on – it’ll come back around to be useful later.
#18: You have to know yourself: the difference between doing your best & fussing. Story is testing, not refining.
#19: Coincidences to get characters into trouble are great; coincidences to get them out of it are cheating.
#20: Exercise: take the building blocks of a movie you dislike. How d’you rearrange them into what you DO like?
#21: You gotta identify with your situation/characters, can’t just write ‘cool’. What would make YOU act that way?
#22: What’s the essence of your story? Most economical telling of it? If you know that, you can build out from there.
Ethos Pathos Logos – Communicating Aristotle Style
June 25, 2013 § Leave a comment
Communicating Aristotle Style:
1) Ethos – Establish the Who and How of You: Establish your Character and Credibility with the Audience
Ethos is a Greek word meaning “character” that is used to describe the guiding beliefs or ideals that characterize a community, nation, or ideology. The Greeks also used this word to refer to the power of music to influence the listener’s emotions, behaviors, and even morals The word’s use in rhetoric is closely based on the Greek terminology used by Aristotle in his concept of the three artistic proofs.:
2) Pathos – Make an Emotional Connection to your Audience; Make your communication matter to them; Lead them down the path with a compelling story.
Pathos: Greek for “suffering” or “experience;” representing an appeal to the audience’s emotions. Pathos is a communication technique used most often in rhetoric (where it is considered one of the three modes of persuasion, alongside ethos and logos).
Aristotle focused on whom, toward whom, and why stating that “It is not enough to know one or even two of these points; unless we know all three, we shall be unable to arouse anger in anyone. The same is true of the other emotions.”
Emotional appeal can be accomplished in a multitude of ways:
- by a metaphor or story telling, common as a hook,
- by passion in the delivery of the speech or writing, as determined by the audience.
- Language choices matter. Specific words matter. Great writers and storytellers are born from tremendous pathos.
3) Logos – Logic; Make fact based connections explicit from your analysis to conclusions. Persuading by use of reasoning. This was Aristotle’s favorite.
Effectively Communicating was figured out over 2000 years ago……a simple 3 step approach.
A Boy 6 – 9 Years Old Is Responsible For His Dad’s Cows…..
May 25, 2013 § 1 Comment
A Story of a Young Kenyan Boy, Richard Turere, who made peace with the Lions.
One Year Ago, I was just a boy in the Savannah grassland herding my fathers cows and I used to see planes flying over. I told myself one day I’ll be there inside [that plane}…and here I am. My big dream is to become an aircraft engineer and pilot when I grow up.
There’s so much to this story. A 12 yr old dreamer. A problem solver. An entrepreneur. The creator of “Lion Lights”. A story of getting on the world’s stage at a Ted conference and sharing with us all. A story of making peace with one’s enemies.
My community is the Masai. We believe we come from heaven with all the animals and all the land. That’s why we value them so much. So I grew up hating lions so much…..
An amazing and inspiring story we can all learn from.
https://www.youtube.com/watch?v=RAoo–SeUIk
Colin Powell: “It’s All About the People”; and his Thirteen Rules
May 15, 2013 § 1 Comment
A book landed on my desk from a fellow respected colleague and growing friend at Mozilla. Thanks Pascal! The book was Colin Powell’s: It Worked For Me – In Life and Leadership.
The core of the book and of Powell are his Thirteen Rules and the stories of the people in his life. These thirteen rules are self-described quotes or aphorism he had collected over the years (prior to the Internet). He kept them front and center under the glass cover of his desktop. I present them here as I can’t land this book on everyone else’s desk who might be reading this blog. It’s much more efficient in simply sharing this way.
1. It Ain’t As Bad As You Think. It Will Look Better In The Morning (Attitude)
2. Get Mad, Then Get Over It. (Attitude)
3. Avoid Having Your Ego So Close To Your Position That When Your Position Falls, Your Ego Goes With It.
“Disagree with me, do it with feeling, try to convince me you are right and I am about to go down the wrong path. You owe that to me; that’s why you are here. But don’t be intimidated when I argue back. A moment will come when I’ve heard enough and I make a decision. Loyalty is disagreeing strongly, and loyalty is executing faithfully.” « Read the rest of this entry »
Sitting in My Dad’s Study
May 9, 2013 § 3 Comments
Happy Birthday Dad! I figured I’d celebrate it with a blog post to share a couple of lessons I learned from you! Thanks!
2 Lifelong Lessons: Learning and Teaching
I was 12 or 13 years old and sick of school. Sick of homework. I hadn’t yet realized learning is fun. All I knew is there was homework to do and it felt like a chore. I couldn’t wait for school to be over so I could start having fun in life. I remember thinking to myself, “Did I really have 6 or even 10 more years of school?”
One day, I walked into my Dad’s study (he was a Doctor and 40 yrs old +/-) and I found him absorbed in a pile of books in the middle of a beautiful day seemingly studying. I recall saying something to the effect of “Hey Dad, what are you doing? It looks like you are studying”.
He said “I am”.
I paused in confusion. “But Why?” I asked. “I thought that once school was over, you never had to study or do homework ever again?
He paused and then said very matter of factly and very presciently “You know Jim, you never stop studying or learning in life. In fact, new books and techniques are developed every year and I have to keep up on all of them”
Again I asked “But Why?”
And my Dad said so impactfully:
“Well, there might be something in these books or new techniques that could help me save somebody’s life someday. Imagine if I didn’t keep up with all this new material?”
A second conversation with my Dad (in his study) occurred a few years thereafter. This conversation centered around Teaching. I remember asking him “Is everyone who goes to medical school a great doctor?”
He explained to me that not all doctors were equal and those doctors that put the effort in and “got A’s” in medical school were probably better than doctors who got “C’s or D’s” He continued to explain how all medical schools had a very regimented and rigorous core philosophy to ensure all doctors granted a license were qualified to actually be a doctor.
I’ve never forgotten his explanation of this core medical school philosophy and how it consisted of 4 distinct phases all students went through in medical school.
- Read It and Memorize It – Year 1
- See It – Year 2
- Do It – Years 3-4
- Teach It: Internship and Residency
The words my Dad used that day have been emblazoned in my psychological makeup ever since:
“You don’t become an Expert at anything until you actually have to Teach somebody else what you think you know”
Knowing my children will be 12 and 9 this year, I’m waiting for the right moment to share with Trevor and Claire what my Dad taught me.
1) You never stop studying and learning.
2) Only until you Teach somebody else, do you become an Expert
Happy Birthday Dad! And thanks again for your valuable life lessons!
Big Bang Disruption: The New Innovator’s Dilemma
April 24, 2013 § 6 Comments
Every so often a new article appears that deserves to be captured more permanently than the latest Tweet or forgotten bookmark. When these appear I intend to immortalize them here in this blog for much easier future reference. Big Bang Disruption is one of thee articles. Printed in the March 2013 issue of Harvard Business Review’s “The Magazine”, I’ve summarized it below as well as providing the full article.
— Clayton Christensen’s 1995 HBR Article and 1997 Classic Book has a blind spot.
— Entire product lines can now be wiped out overnight.
— Disrupters can come out of nowhere and be instantly everywhere
— Many times these “Big Bang Disrupters” are unintentional and unplanned.
–Three devastating features of Big Bang Disrupters
- Unencumbered development
- Unconstrained Growth
- Undisciplined Strategy
–Hackathons as examples of “hourly development”. Experimentation of commodity technology is easy.
— It’s like a giant game of Battleship as innovative failures are raining down around you. Soon, one of the new big bang innovations will hit.
— Mobile + Cloud is the big game changer. Undisciplined Strategy. Fire – Aim – Ready
— Truth Tellers are the key to survival. Find one now.
Old-style disruption posed the innovator’s dilemma. Big-bang disruption is the innovator’s disaster. And it will be keeping executives in every industry in a cold sweat for a long time to come.The impact of big-bang disrupters is certainly amplified for technology- and information-intensive businesses, but most industries are at risk.
Big Bang Disruption
Harvard Business Review – Article
By now any well-read executive knows the basic playbook for saving a business from disruptive innovation. Nearly two decades of management research, beginning with Joseph L. Bower and Clayton M. Christensen’s 1995 HBR article, “Disruptive Technologies: Catching the Wave,” have taught businesses to be on the lookout for upstarts that offer cheap substitutes to their products, capture new, low-end customers, and then gradually move upmarket to pick off higher-end customers, too. When these disrupters appear, we’ve learned, it’s time to act quickly—either acquiring them or incubating a competing business that embraces their new technology.
It’s All About the Long Term – Amazon Shareholder Letter(s)
April 14, 2013 § Leave a comment
I’m re-posting a deeper analysis of Jeff Bezos’s recently published annual shareholder letter along with an additional history and perspective.
Amazon’s story has special meaning for me and this long-term view is a big part of the story. Watching Amazon’s success unfold over the years has been an important business and life lesson for me. I’ve always been a big fan of Jeff B having known him since the early days of Amazon. In 1996, in the very early days of e-commerce, I was at the Internet Shopping Network (ISN) and part of “the big 3” of early e-commerce (Amazon = Book sales; CDNow = Music sales; ISN = Computer Sales. We all used the same “middle man model”; Amazon = Ingram Books; CDNow = Ingram Music; ISN = Ingram Micro. Suffice it to say, I’ve had very real and very deep and detailed operating experience in the e-commerce arena.
History
First, a bit of a history lesson on e-commerce to complement and add perspective to this long-term view blog post. In the early days of e-commerce (1995-1998; Amazon’s first book sale was July, 2005), the model was to simply get a dump of the big 3 distributors databases/catalogs and to repackage the information into nice looking web pages with pictures, prices, text narrative, and of course a Buy button (with a bunch of other back-end code, operations, EDI Technology.).
That’s was the entirety of e-commerce in those days. It all started with that. Nobody owned their own warehouses. We were simply resellers without any brick and mortar. We bought at wholesale, sold at “retail”, and everything was shipped from the Ingram’s warehouses to the customers of Amazon, CDNow, and ISN. In fact, Amazon didn’t open their first real owned and operated warehouse/distribution center until 1998. It was 100% manual pick/pack – but they owned it. Amazon proceeded to open six more key distribution centers in 1999, the year they really leaned into doing whatever it takes for customer satisfaction and away from having some other firm (Ingram) control your back-end customer experience.
We crossed path’s again in 1997/1998 with Netflix and their brief acquisition offer. And, I got to know Jeff best of all in the 1999-2000 era with WineShopper.com when we were a huge Amazon investment and briefly a tab on Amazon’s home page (Wine). http://cookflix.me/117CFeQ
“It’s All About the Long Term”: the Scott Cook influence
The title of this post is from Jeff’s 1997 original letter but he buried it a bit as “The Headline”. Jeff’s always had a long view mentality, but I believe this was drilled into him and he embraced it fully around the 1996 time frame when Scott Cook began mentoring Jeff. Scott officially became a key board member in Jan, 1997. The long-term view was one of Scott’s key mantra’s and he drilled it into all of us at Intuit in the late 80’s/early 90’s. Scott’s other big mantra from 1993 was to “Wow! the Customer” (inspired by Tom Peters 1994 book he had read and proceeded to hand out to all of us). Scott clearly impressed and/or reinforced the concept of “Wow!” with Jeff and now Jeff is impressing it upon all of us by proving it to us over the last +15 years. Here was Jeff B’s quote on appointing Scott to his board in Jan, 1997 after six months of great mentoring:
“We are delighted and honored to have Scott Cook join the Amazon.com board of directors. No one is better at using technology to serve customers than Scott Cook,” said Jeff Bezos, founder and CEO of Amazon.com. “His experience building the preeminent financial software company in the face of fierce competition will be of great benefit to Amazon.com. ”
More Amazon history, Jeff’s eternal optimism, and his long-term view:
1997-1999
Amazon went public on May 15, 1997 (I have the original S-1 if anyone wants to see it!). This IPO document clearly and highly unusually stated it did not intend to make a profit for the next four to five years. Unusual? Absolutely! For perspective, the bankers wouldn’t take Intuit public in 1993 until we had 9 quarters of consecutive profitability. By 1997, that was down to 4 quarters of profitability. Today’s times have changed, but in that day to go public and to say explicitly you weren’t focused on profits for four to five years was so far “out there” and “long view” that many investors shunned the stock and actively shorted it. After all, it was still 1997, the heady days of 1999 were just barely beginning and certainly investors hadn’t lost their heads yet. There were many good reasons to short Amazon. The analysts weren’t wrong “short term” but Jeff/team simply out executed them and eventually proved them wrong in the “long term”. Read on and you’ll see it took four more years to actually turn their first very small but consecutive profit.
1999-2002
In two quick debt financings in Q4 1999 and in Q1 2000, Amazon borrowed a total of nearly $2 billion in convertible long term debt (10 yr notes at~5-7% interest rate). As a backdrop, Amazon’s total cash & marketable securities as of March 31, 2000 (after this cash/debt raised) was $1.0 Billion and it was burning $300 million of cash in operating activities a quarter.. They had just reported 1999 annual revenues of $1.6 billion and gross profit (after cost of sales) of $300 Million for 1999 and had just borrowed nearly $2 billion by March 31, 2000.
Amazon turned it’s very first quarterly profit in Q4 of 2001 (where it typically still received 40% of annual revenues in classic retailer seasonality) and proceeded to go negative again until its second every quarterly profit in Q4 of 2002.
Amazon was 7 years in and had been a public company for 5 years when in July 2002, a Business Week article wrote, “after seven years and more than $1 billion in losses, Amazon is still a work in process.” In fact, in 2002, Amazon ended up laying off 1,300 employees (15% of its workforce) and closing one of its distribution warehouse centers and bet the house even further with a very risky strategy of lowering prices across the board and offering free shipping (causing analysts to cry “desperate times call for desperate measures” and many proceeded to short the stock even harder convinced of the company’s eventual demise)
By 2003 – the headline in Amazon’s Q4 2003 Financial Statement Release led with the headline:
“AMAZON.COM ANNOUNCES RECORD FREE CASH FLOW FUELED BY LOWER PRICES AND YEAR-ROUND FREE SHIPPING” with a classic Jeff B quote of:
“Our commitment to year-round free shipping and lower prices continues to be a win-win for our customers and Amazon.com,”
said Jeff Bezos, founder and CEO of Amazon.com. “In addition to purchasing thousands of $29 DVD players this holiday season,
customers also bought Tibetan yak cheese, pomegranate molasses and zero carb cheese straws.”
2003 Revenue had just surpassed $5 Billion and Amazon was finally turning an operating income profit of under $300 Million (~5% of sales) and its first ever positive annual net income of a whopping $35 million (< 1 % of sales). Amazon was now 9 years in and 7 years since going public. It also announced it would begin repurchasing up to $500 million of it’s still current $2 billion of long term debt.
2005-2008
- Feb, 2005 – launches Amazon Prime
- by Dec 31, 2006 – 220,000 developers are using AWS (Amazon Web Services; launched in 2002/2003)
- In 2006, launches Amazon Simple Storage Service (S3) and Elastic Cloud Computing (EC2)
Back to Jeff B’s 2013 and Historical Annual Shareholder Letters
I realize many of you may have already seen last week’s news story that prompted this post. Others of you may have skimmed the actual letter itself. In today’s fast paced world, I’m betting many of you may have missed the key points I’ve attempted summarized below. The keys to business success are relatively straightforward and simple; (1) Vision and Passion (2) Customer Obsession and (3) Long Term View. That’s it. Pretty simple and powerful.
Some quick summaries and my personal key take-away’s from the published shareholder letters. I’ve added a few other letter’s along the way and some key metrics as bonus material.
1997 Letter
- We will focus relentlessly on our customers. We will “Obsess Over Customers”
- We will continue to make bold (not timid) long term investment decisions vs. short term profitable one’s or short-term Wall St reactions.
- We will measure and learn from both our successes and our failures.
- We are prioritizing growth over profitability in order to achieve scale which is key to our business model
- Our success is dependent on attracting and motivating employees each of whom must think like, and act like, an owner
1997 key metrics: Market cap = $ Revenue = $150 Million Net Income -$28 Million; Debt = $75 Million; Cash Equiv. Balance = $125 Million; # Customers = 1.5 million; # of Items Shipped = < 7 million; # of Employees = 614
1999 Letter:
- served over 17 million customers in 150 countries
- sales of $1.6 Billion (up from 600M in 1998)
- Book sales fall slightly below 50% by end of 1999. In 1997, they were 100% of sales
- Int’l Sales = 22% or $350 Million
- Worldwide Distribution Capacity (warehouses) grew from 300,000 sq. feet (1 large size Safeway warehouse) to 5 million square feet.
- Year 2000 Goals: 1) Grow and Strengthen Customer Relationships 2) Product and Service Expansion 3) Operational Excellence 4) Int’l Expansion
2000 Letter:
- Share price down 80% (Ouch!)
- 20 million customers; Sales of $2.6 Billion; Cash Equiv = $1.1 Billion; Debt = $2.1 Billion;
- Avg. Spend per customer = $134
- Big “bold bets” in many investment areas including Living.com and Pets.com both of which shut down in 2000.
2004 Letter
- a 2 page
diatribeeducation on free cash flow per share using a hypothetical company and spreadsheets embedded in the letter! - More on Free Cash Flow Per Share as Amazon’s Key Metric
- $477 Million of Total Free Cash Flow in 2004
- Paid off $600 Million of previous $2.1B in long term debt
2004 key metrics: Market cap = $19 Billion; Revenue = $6.9 Billion (44% Int’l); Net Income = $588 Million (8-9% of revenue); Debt = $1.9 Billion; Cash Equiv. Balance = $1.8 Billion; # of Employees = 9,000
2011 Letter
- The Power of Invention; the most powerful and radical invention are those that empower others to unleash their creativity
- Examples = AWS, Fulfillment by Amazon, Kindle Direct Publishing; powerful self-service platforms
- One of first inventions in AWS (the S3 simple storage service) now holds nearly 1 Trillion data objects; 1 billion objects added daily
- S3 avg’s 500,000 transactions per second with peaks of 1 million transactions per second
- KDP (Kindle Direct Publishers) allow authors to keep 70% of the revenue (vs. 17% avg with traditional books)
2013 Letter
- Customer-centric view = defining element of our culture
- Internally driven to “wow” customers and invent before we have to
- We don’t react to competition. We react to our customers needs.
- We “Wow Customers” and “Put Customer First”
- We Surprise, Delight, and Earn Customer Trust
“Amazon, as far as I can tell, is a charitable organization being run by elements of the investment
community for the benefit of consumers,” writes one outside observerJeff’s response: “…long-term thinking squares the circle. Proactively delighting customers earns trust, which earns more business
from those customers, even in new business arenas. Take a long-term view, and the interests of
customers and shareholders align”“As proud as I am of our progress and our inventions, I know that we will make mistakes along the way – some will be self-inflicted, some will be served up by smart and hard-working competitors. Our passion for pioneering will drive us to explore narrow passages, and, unavoidably, many will turn out to be blind alleys. But – with a bit of good fortune – there will also be a few that open up into broad avenues. I am incredibly lucky to be a part of this large team of outstanding missionaries who value our customers as much as I do and who demonstrate that every day with their hard work.”
2013 key metrics: Market cap = $124 Billion Proj. 2013 Revenue = $75 Billion; Proj. 2013 Net Income = $675 M (~1% of sales); Debt = $4.5 Billion; # of Employees = +88,000
In conclusion, it’s been nearly 18 years since Amazon sold their very first book. Amidst all the early and loud negativity (huge losses, huge debt, layoffs and faltering market value), Jeff was eternally optimistic and the poster boy for the “long term view”. Most importantly, he’s executed “long term” and taught us all valuable lessons along the way. And “It’s Still Day 1!”
Jeff’s original 2013 letter > Amazon2012-1997-Shareholder Letter
amazonshareholderletters1997-2011 < Complete History of Jeff’s Annual Shareholder Letters